The Weaponization Of The Dollar
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- เผยแพร่เมื่อ 27 ส.ค. 2024
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The sanctions on Russia’s central bank use the reserve currency status of the US dollar to punish an American adversary. Will the US dollar lose its exorbitant privilege? What currency might replace the US Dollar as a reserve currency?
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suppose there is constant demand for dollar as reserve currency, FRB can simply print more money.
lowering interest rate without fear of inflation.
but purely political and ideological reason(mostly conservatives), there is always resistance to take such policy.
Ok one thing i find funny. You bring up the argument "it's totally free, so there's no reason not to try it out" hahaha
Man we are here because we are interested in economy... and nothing is completely free. Don't try to bullshit us like that 😂
How come you aren't on president Biden advisory team. You have alot of knowledge an can help America
@@iamyourfan9729 everyone needs to grow one way or another in this money driven world.
@@Top12Boardsport Im not complaining about him selling us SOMETHING. i find the way he's trying to do it funny. At least tell us they are using our data for research purposes or smth and thats why it's free...
I am humbled by the amount of great insights perfectly packaged I can get for free, and can't thank enough. Ages ago, I graduated in Economics and I didn't get the quality of insights I'm getting from this channel!
I see. But currently it is trading post pre pandemic levels in Moscow. Just news from Western media.
100 percent
We’re you a lazy student?
How many hours did you commit to studying outside your classroom?
Did you read all, (actually half) of the recommended readings by your lecturers?
It's a testimony to the abandonment of journalism by the mainstream media in lieu of sensationalism. I think FOX "NEWS" is running another story about the threat of immigrants in a country that was formed by immigrants.
The U.S. Weaponized Dollar is Triple Backed ,
1 - by Petrodollar oil ,War
2- Reserve dollar SWIFT Sanctions
3 - US Treasury bonds Trade , Stock market, And International Banking
EQUALS GLOBAL ECONOMIC MANIPULATION
I studied economics at Kings (2017-2020) and I can't believe I never received a lecture from you. The content and delivery is top quality!
Patrick is on another level!
@@yeetyeet7070 such as? you have me curious
@@yeetyeet7070 You are using grammar to convey your intended meaning. The grammar you use had evolved even before the birth of 'boomers'. Can you detect how your prejudice might be problematic?
@@yeetyeet7070 Modern monetary theory is as much science as the flat earth theory.
The quality of your content is on another level, thank you for all your hard work
I'm not involved in any kind of financial business or such but I find your videos informative and give me a different perspective on things. Keep up the awesome work.
Same. I can’t explain how interesting this is. It’s like it scratches a curiosity itch I didn’t know I had.
It's fairly important for common people to understand how such bullshit works. It helps to cut through the political narrative and see things how they are.
Same
Really...??? 🤣🤣😂😂😅
I don't know, the reason countries buy assets in USA, London etc. is for the fact that there is enough trust in the legal system that these assets will not be taken from them. What the sanctions are showing them right now is that this assumption is not entirely true. Even if the system survives the next five years, suffice to say the journey for an alternative has already begun. Failure in an attempt doesn't mean that the idea behind it is flawed.
I think what you are saying is that countries that are unilaterally sanctioning and freezing assets have just flagged themselves as massive sovereign risk. The capital flight will not be immediate but it will happen.
One can see the QT announced by the Federal reserve as an attempt to prop up the dollar. Raising interest rates cannot do all the work.
Ditto Russian demand to be paid in roubles for their exports.
The next strike against the US most probably be the undermining of the US trustfullness "perceived or otherwise" to store ones gold reserves
Locking down an asset has always been a thing. In my knowledge no country has completely taken the ownership of the assets or repurposed it, in the countries you have mentioned without a legitimate court hearing
@@siddhantdeepful what’s to stop any of the asset havens from declaring oil&gas “environmental warfar” and confiscating assets that belong to entities/individuals from oil&gas producing countries. This was preposterous to suggest a year ago. Now it’s a credible risk.
They still can't take their assets. It is only frozen but will be released one day. So legal security still exists
There can be no alternative when the alternative currencies belong to authoritarian regimes where rule of law and contract law is irrelevant. The sophisticated financial freedoms that come from the English speaking countries ultimately (then spreading to others) is rejected by the rest of the world that don't practice this way of life. Therefore, no institutional development, no reserve currency. There can always be gangster caves of different currencies chosen, but they always fail in terms of security and long term stability. In other words, wealth is not safe and can simply be stolen. Before sanctions are mentioned, these are criminals and not the every day person. Criminals will always be sanctioned and prosecuted.
0:28: 💰 In 1944, representatives from 44 nations gathered at Bretton Woods to create a new financial system, resulting in the establishment of the World Bank, IMF, and the dollar as the international reserve currency.
3:25: 💰 The US has used financial sanctions as a form of warfare, leveraging the power of the US dollar and access to the global financial system to target countries like Ukraine and Iran.
6:20: 💰 Western sanctions against the Russian central bank quickly undermined its ability to support the Russian economy, resulting in inflation and supply chain difficulties.
8:56: 🌍 The impact of sanctions on Russia's economy and the response of other countries
11:52: 🌍 The escalating economic war between Russia and the West is causing countries to question their reliance on the US and the dominance of the dollar in the global economy.
15:12: 🌍 The Chinese government's desire for a global currency to rival the dollar is hindered by their need for strict control over their national financial system.
18:11: 📈 The growth of a country's economy and its ability to manage its level of debt are important factors in supporting the value of fiat currencies.
Recap by Tammy AI
I just found this TH-cam channel today. I watched 3 videos already and for the next 48 hours, I am going to watch as much as possible Patrick Boyle's videos. Very interesting. Patrick Boyle's ability to explain the complex structure of what macroeconomics and financial system in a monotonous way of speaking for me is captivating.
Thank you so much for this Free Masterclass. I learned more from this channel than my entire time spent at university unfortunately.
The reserve currency status of the Dollar grants the U.S. the de-facto right, or at least the power, to tax other countries, simply by monetary inflation (raising the ratio of U.S. money in circulation to the amount of goods and services being produced). When we engage in monetary inflation, we essentially reduce the purchasing power of all the dollars previously issued, amounting to a direct tax on holders of those dollars. It's no surprice they resent that power.
That effect isn't really that big and it's stupid to resent it. No one is obligated to hold depreciating dollars in large amounts. Also, same applies to any other currency.
Kinda agree with that since US are no longer back it with precious metal like gold.
Basically dollar are just based in "Trust me, i can do it". That might be work if US don't have mountainous debt which make every countries in the world worry and diversify their currency stocks especially after 2008 financial crisis. The world still haven't recovered from that.
We are all occupied by the Global American Empire.
@@yudhiadhyatmikosiswono9082 Does US really have dept though? In the past, empires used to collect tribute. What was obviously in plain sight in the past seems to be hidden today, providing a facade of freedom and fairness. It is much easier to sell the idea that the US is borrowing money rather than saying other countries are paying tribute. But lets ask ourselves, if the US decides not to pay back any dept, what consequences are they going to face? Almost none. The US has the economic and military power. No-one is going to be able to force them to pay or hurt them militarily or economically.
The US already defrauded the whole world after WW2 with the Brettonwoods agreement. The US was not supposed to print dollars more than the gold reserves but it did and went on a shopping spree around the globe for a few decades. Essentially they bought up the world with fake receipts for gold (dollars). France was the first to wake up and demand actual gold. US simply refused and ended dollar to gold convertibility. That was a global scam, yet US faced no consequences.
If US says, they are not paying back any debt, no-one will be able to do anything. The only reason it is paying back anything now is to keep the illusion going. The US is taking in much more than it is giving back. Make no mistake about it, other countries aren't loaning any money to the US, they are paying TRIBUTE.
@@seneca983 some countries don't have a chance, look what happened to Venezuela, Iraq and Libya when they tried to sell their resources in other currencies...
Some points:
The majority of Franchise MacD's in Russia remain open. They just refused to close... some have rebranded but offer the same menu
Social Media from Russia shows pretty conclusively that there no significant shortages of supermarket items. Some of the markets affected as the automotive market where vehicle and spare parts costs are increasing and of course western brand retail products like clothing. This is a result of 2 factors; The changes Russia made to ensure it's food independence after the 2014 sanctions and most major European Food companies have not withdrawn from Russia.
Please source these takes. Russian Z news is not credible right now
I feel like bookmarking your comment and coming back 6 months later to point out how shortsighted you were.
@@tetleydidley I mean yeah it's not like anyone is stopping you also he is talking about condition of now and didn't mention anything about future predictions
@@tetleydidley He/She is not shortsighted. The US still imports Russian oil, moreover, it has increased its import by 43%, 100 000 barrels per day. You're simply naive. Sorry to say, but I suspect Patrick Boyle is now a White House or mainstream media propaganda prostitute.
@@neues3691 Recently, yes. Well, it all started with the US hacking the Chinese government in the late 90s, and when the Chinese retaliated, they did better than the US and subsequently resolved with the US bombing the Chinese embassy in Belgrade. Unfortunately, your claim doesn't hold water.
You have a incredible grasp of economics matched by an amazing ability to explain it simply to us mere mortals !
He does know some aspects. It's worth saying that he was a hedge fund manager so this isn't a surprise.
@@zaco-km3su Aaah OK ! I didn't know this , I guess that he is mortal and fallible like the rest of us then ...
Patrick, your explanations of these complex issues are so clear. Thank you and Bravo.
Johnny Bravo?
@@stevendefehr4393 Patrick Bravo, his cousin
Thanks Patrick for putting in the work and dropping knowledge, you are really appreciated.
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Very interesting! Two corrections if i may. As an Englishman in Russia, i can say that the shelves are full but a reduced choice and some McDonalds franchises are open. I was walking down the embankment in Kazan only yesterday and saw a McDonalds open much to my surprise.
Meanwhile in the EU they are talking about energy rationing. It's a bit like having energy is more important than Starbucks or McD
From a story I read recently, the Russians are reopening the McDonalds independently, like you often see with franchised restaurants whose parent company has closed.
Hey, you two! Stop breaking the propaganda. People need to know that the sanctions hurt Putin and Russia more than they hurt the West! So shut up with your full shelves n stuff. Pretend like you’re in a famine or something, that would lift our ego!
@@simonescelsa It's only talk so far as energy hasn't been sanctioned. If it is it will be hard for both Europe and Russia.
@@bonnienadinenewman very sweet of you 😍 Yeah, what i read back in British media is so wrong on many levels. It's like when Russia hosted the 2018 football World Cup. There was a massive smear campaign beforehand by the BBC and other MSM and when people came to Russia, they were pleasantly shocked to see a different Russia to what was portrayed in Western media. I love my home UK but Russia too. I no way deminish this invasion, but there has been and is now Russia-phobia on a unprecedented scale.
Great video! One thing you didn't mention is how the US is now forcing Russia into a default by preventing it from servicing its debt in US dollars even though Russia has money to do so.
this is why Russia is offering to pay in roubles.
America 'freezing' savings like this creates sovereign risk ...for AMERICA. Bone headed move.
Dirty tricks
That is not a default but the debt is frustrated. The debtor did what it can reasonably do to pay the debt and has the funds but it didn't work because of something else.
@@philognosis6409 its called a technical default
@@TheManinBlack9054 " A technical default is a deficiency in a loan agreement that arises from a failure to uphold an aspect of the loan terms (other than the regularly scheduled payments).
Lenders will typically outline provisions that can lead to technical default in their loan agreements.
Some of the most common technical default provisions include the maintenance of qualifying ratios: for example, a borrower’s total debt-to-income ratio or the maintenance of the housing expense ratio." just from Investopedia. I don't see how that is a technical default. Russia didn't impose anything that would prevent payment and it's a bond not any sort of political promise or the like. If a country tried that when the US invaded Iraq I would laugh at them because of the farcity of the proposition.
This channel shows me how little I actually understand about the world around me
keep watching. my amateur opinion says you won't find more accurate, or clearly expressed, analysis of economics, on any other YT channel
I dislike the language that Morning Brew requires TH-camrs (such as Patrick Boyle and How Money Works) to use. They insist on you and others talking as if you personally would recommend it, when in reality, it's just another marketing-driven service that relies on sponsorships instead of quality to push it's exorbitant fees.
The must watch video on your channel!
This was a very illuminating discussion. Thank you.
It's happening in Canada, some shelves are empty, prices are increasing by least 10 to20 percent .In 70's Canadian dollar was worth more than the US dollar. Just observation from a senior Canadian
Patrick, any chance we can get a 9 month update on this?
Incredibly dense. I have to watch it 10 times at 0.5 speed to actually grasp it all. Thanks Patrick!
Love morning brew...with that said
Your content is always well put together!! Keep it up!
Actually there are still MacDonalds in Russia. Independent franchisees. Small point I know. A somewhat larger omission is the fact that Russia is demanding payment in roubles for gas and oil sold to unfriendly countries. As you sort of intimated, the US is not doing itself or SWIFT any favours by using them as weapons. Alternatives will be found. Now that the US has seized central bank reserves I should think a few countries might reconsider where they keep their reserves. Of course they could continue to keep their gold in the US because the US would never keep it.
Except that many countries have been busy repatriating their gold from the USA in the past. Because the US WILL likely confiscate them all when push comes to shove.
Given that the McDonalds' have "gone rogue" it really depends on whether you define a McDonalds by it's intellectual property or by it's experience.
i guess the name now our macdimitri.
Raskolnalds
@@gigitrix Of course it's experience for most of the customers. Most of them won't notice any difference at all.
Please keep up with these greatly insightful videos as they are very helpful and informative.
Thank you, Patrick!
Always love your videos Patrick, thank you for uploading!
Your last point is nonsense. It’s the chicken and egg argument. America was a power prior to reserve status but it was able to do this because it was the only major economic power that wasn’t devastated by WW2 and was the major industrial power of the world. America today has lost its trade scale to China and it relies on this reserve status to make itself attractive to immigrants and sucks up the brains of the world. If America loses this status then it will suffer a massive social, political and economic decline that’s irreversible. U.S would have to rebuild its industrial base and start from scratch. That’s not something that can ever be done. It would have to find a radically different economic model away from industrial capitalism, and let me tell you there’ll be civil war before that happens.
Yes, there are many fallacies in the video. America became an economic power through size (population), innovation, and war. Starting with expansion westwards over Indian territory after the War of Independence.
Unfortunately for America, it is not the only country now with size, innovation and war-making capabilities.
You pop his bubble
Key word here is "If"
Can't you make your point without saying what he said is nonsense? Your own point is full of "ifs" and conjectures that may or may not come to fruition. In fact, you know as much as the next guy, which is, not much, no one knows what will happen.
@DeeZeed Nope you have it backwards, the US shipping jobs overseas through globalization has made the rest of the world much more prosperous (especially Asia), and its role as guarantor of the shipping lanes has made it possible for countries like China to have access to the resources it needs to level up. If the US lost its reserve currency status, it would just speed up the process that is already happening (the southern US is already re-industrializing). This Ukraine situation could very well be America's last hurrah on the international stage before it goes into another period of isolationism. The US can be self-sufficient, bringing jobs back home from overseas with a token rise in costs for consumer goods. This would badly damage other nation's economies (namely China) who depend on the US to buy their goods. With the shale boom, the US is now energy self-sufficient, so no need for having bases in the Persian gulf. China is not (currently) in a position to take the US position a protector of the sea lanes, and could have it's energy lifeline cut. Bottom line, the world needs the US, not the other way around.
You're great! Highly informative yet a good sense of humour. I like that you're embracing the background game. What's next - an abandoned business in the background talking about retail investor opportunities for wealth building? Whatever it will be, you're a treasure!
I'd like to understand why a country such as India is under the scanner for buying Russian oil, but it's acceptable if EU continues to buy (more) of Russian gas?
because India is not sanctioning Russia which is against the wishes of the US. Thus the USA is attempting to DICTATE to India how it is to spend its monies and manage its economy and foreign policy.
Bcz they can't make point out of it's own allies so they need some other punching bag that being said many European nations like UK , Germany,Poland have said that they understand Indian position so definitely all of them are not being petty especially considering Europe and USA on average is 5.5 times richer than India and even than cost of petrol, diesel are making life difficult of ordinary Europeans it's effect on India would be devastating
because it's easier to put pressure on India because a) it has a relatively small economy, smaller than Germany or the UK and b) the US doesn't need to keep India on board regarding Ukraine, since India already openly supports Russia and is in any cease far enough away to not really matter.
So basically no real reason. Lol
It's not just because they can. For a start the two commodities, oil and gas, are completely different animals.
Currently most of Europe has no alternative but to continue to buy Russian gas although they are pivoting away from it by increasing LNG imports and building new nuclear power plants. But that will take time. YEARS.
The West is trying to use financial methods to stop the invasion of the Ukraine. India buying Russian oil at bargain prices may seem like a good idea, but it supports the Russian economy and war effort. Stopping buying Russian oil is something that India can do NOW without significant hardship to itself while putting pressure on Russia NOW.
Darn, only by accident, I bumped into this episode, and man, I have to appreciate this guy's ability to pack so much informative and educational stuff in 1/3 of an hour clip 👍
Really appreciate the work you put into your content!
Amazing content you won't see on other channels no bias just facts, well done Mr Boyle and thank you interesting subject.
You talk about Russia using capital controls to strength its currency as artificial, as if sanctions are not a form of capital control
Indeed.
Did he say otherwise?
This is very insightful. Thank you for posting.
One of the most valuable channels I have ever come across.
Having USD be a global reserve currency means that the US government can print money whenever they want to decrease the wealth of other nations, and this is insanely powerful
Only one side acknowledges the world being in the midst of a currency war between the US lead bloc vs Emerging Markets: in which quantitative easing policy is used to export inflation to the latter.
Insanely wicked
Yup. Making debt cheaper
The U.S. Weaponized Dollar is Triple Backed ,
1 - by Petrodollar oil ,War
2- Reserve dollar SWIFT Sanctions
3 - US Treasury bonds Trade , Stock market, And International Banking
EQUALS GLOBAL ECONOMIC MANIPULATION
It also makes Americans enjoy higher standards of living without working much. Japanese work themselves to death and still couldn't pass US.
Simply because game is rigged.
Densely packed with quality information. Love these videos, I am amazed and thankful!
Love, love, love your TH-cam channel.
I'd love to see you revisit this topic with the data over the last 10 months
Me as well. It's popcorn time for the US dollar. Especially future bond purchases 😂
Great explanations. If other countries were so disadvantaged using the dollar as their reserve, a black market would have developed. Well, there is type of a black market in terms of currency manipulation, but mostly to make the dollar MORE valuable!
China didn't decline to criticize the Invasion, they said US is at fault. So basically only so colled "collective west" is against Russia. Primarily white countries. While at the same time Russia supported by very diverse countries. Makes you think
What does that make you think?
China is sitting on the fence but will make a move. Both Russia and China will rise then fall. The west will move to other resources after a few issues. Putin will die
@@megja1812 all great powers rise and fall. US has been a great power for quite some time. Its time to say goodbye 👋
Yeh Russia supported by other authoritarian countries like Iran and North-Korea. How nice
How come I never get bored with these reports?
NATO countries, while only about 12% of the global population, represent almost half of global GDP. Consequently it appears to me USD will likely remain the global reserve currency. Frankly that's also why NATO dominates as a military alliance as well, even though it only represents a small fraction of global population, they have the money to prosecute wars and the technology to win. 🤷🏻♂️
Consider debt😋😉
@@bobpadok5331 When you owe a million dollars thats a you problem. When you owe 20 trillion that's their problem.
Less than 10%
this is very interesting, I never knew much of this. For example, I didnt know that not being reserve currency would actually mean a big boost to the economy of that country.
I just love your videos. They always get into the details!
I agree that the USA would have faster growth and other nations would have slower growth if the dollar was no longer the reserve currency. Not only do I agree but it would bring higher wages for the majority of USA citizens since companies would no longer be able to export jobs for cheap. It would not only decrease the national debt but it would decrease individual debt and get the economy going again. The 1% would no longer become fabulously wealthy off the backs of other nations sweat shops, but the 99% would finally start getting paid and the nation would be useful again.
We can only dream!
I don't know about that. The other countries will respond. The 99% will find themselves paying more for everything. Basically there will be more inflation in the US at least for a while.
I’ve been saving this piece. It didn’t disappoint. Perfect “executive overview”.
The ruble/dollar exchange rate in Russia is back to what it was in January. You can argue about how it has been achieved, but for an ordinary consumer it doesn't really matter. What matters is that there is no deficit of food or any kind of consumer goods in the stores in Russia. Some brands have left but you can always buy similar goods from their competitors or purchase the goods via internet. There are businesses that offer to buy any kind of goods on your behalf and ship them to you for an additional fee. Apart from the inflation that has grown compared to the last year, I'd say the results of the sanctions have been negligible so far.
I have 2 things to tell you one about your comment ,the other is about this war ,first as you said let's not forget that Russia has a big share of some of the rare elements which are essential to create many things let alone controlling the nuclear fuel which means Russians have their cards , the second thing is about bucha I'm not Russian but I found this report which proves that western media lies about bucha also proves manipulating the satellite images in bucha I tried to send the report to Russian media they didn't respond so maybe you can spread it in Russia , the report is by BBC at 14th march talking about this famous grave saying that some of the corpses if not all of them were brought from irpin hospital saying also that the grave had already 60+ bodies at this point which roughly the same number they announced after Russia quitting the area which means as early as 14th march the trench there was huge which proves manipulating the satellite images since they say they show signs of digging at 10tg march and a complete trench at 30th march which leads to questioning the other images about the corpses in the famous street from the same company which is a main part of the western narrative, by the way the report doesn't talk about war crimes just mads Graves if you like I can give you the link or you can search for it by mass grave BBC it's by Laurence peter at 14th march
Putin mistake was threatening to nuke everyone who assisted ukraine while at the same time threatening to invade or nuke finland and Sweden. Had it not been for that nato and the eu would still be divided.
18:14 when your butler is disturbing you
Fascinating, fluent and fastidious.
Was it Germanys decision stepping back from Nordstream2? Don't think so.
It was a reality that was almost forced on them. To the discredit of Germany's politicians they would like nothing more than for this war to end, even if it means Russia gets their way....so long as things go back to business as usual...and to the MASSIVE credit of the German people, they made it very clear that this attitude of "lets watch the world burn while we sit in comfort" was not going to fly.
In an economic point of view, is it clever to give up on a whole market ? Are american and european goods not replaceable ? And you say state debt are safe... I am swiss and if there is a money i avoid it is the dollar, the one that is printed like crazy. Being a reserve currency comes with responsabilities. And using the dollar for all the sanctions tarnish its credibility at the end. And not to forget all the Bullocks i have to sign to use the dollar with my LTD...
Switzerland broke it's neutrality over Ukraine, I suspect the Swiss will experience capital flight much quicker than the US.
What do you mean you avoid the dollar?
Regarding the replaceability of American/European goods - to some degree, it is, but you can't get an iPhone from someone other than Apple (you could argue that iPhones are no longer strictly speaking an American good I suppose). The real deal is American/European services and mostly assets, such as houses/stocks etc which are valued quite highly, particularly in nations where the state can nationalise internal assets at will. It is here, I think, where the sanctions will cause the most problems, as they show the inviolability of property rights for the sham that they are.
16:13 "As their savings rise, the excess must be exported, often in the form of central bank purchases of U.S. or European government bonds."
What does this mean? What excess must be exported? And how is that excess exported as a foreign bond purchase?
🤔🤔🤔 it's not like Mr Boyle to rock a Hugo boss suite. Looks good Patrick. 🧐👍👍👍👍👍
The reason the Dollar remains the Reserve currency is that the other options are so much worse. You want to tie to the Yuan, or the Ruble, or any of the other BRICS countries? Feel free, and best of luck with all that. The Euro might be a candidate, but the stresses on the Euro of tying countries from Germany to Greece and everything in between make that a tough call. I don't think there is any other option that has the liquidity to pull it off.
On another note, I always think it is funny when I hear Gold Bugs talking about Gold being the global store, which is funny given the lack of liquidity of Gold, and it's even funnier when this happens when the biggest problem some have with the Dollar, like in current times, is that it's value is too high.
It's the same issue bitcoin has, where people keep talking about it as a medium of exchange when it's almost always treated as a store of value. And those two have very different needs.
@@MenwithHill
Bitcoin is speculation, not a store of value.
doesnt russia make their own weapons and sell them, why would they have to import them.
Stunningly clear explanation, thanks!
So, Asia has abut 70 % of global productivity but the US is the powerhouse? Relative to the US or even whole western economy ( about 15 percent of global population and only about 3 percent of global children population ) the East is growing much faster. One could argue that the West is in the unstoppable race to the bottom, suffering from incurable institutional and political decay and instability caused by socially destructive " late stage capitalism ". Banking and accounting fraud or wealth transfers to the rich caused by QE are desperate strategies. Will the US still be dominant when they have to pay a trillion dollars in debt interest, which is expected soon? How about a debt default by the US ? I hope that everyone can see an unsustainable Ponzy scheme here.
west's own fault for overvaluing their own currency!
If the US can't pay its debt it becomes the creditors problem, just like if I owe 1 million to the bank it's the bank's problem.
Well 22.5 Trillion of 30 Trillion are held by American public and government departments so some 68-70% of that trillion debt are just Americans paying themselves.
It certainly does seem like the USD owes its continuing primacy in no small part to the fact that the rest of the world can't even come close to agreeing to a viable alternative and that the imperfect global status quo seems to be the least worst option.
Damnnnn
This was seemingly *Very Informative*
☀️☀️
2 years into sanctions. Road so far:
1. Russian economy is on the rise. Economic growth is higher than in any EU state. Growth in both industrial and service sectors.
2. Companies that left were replaced by local ones.
3. Unemployment at historically lowest point. Salaries are raising across all sectors.
4. No shortage of goods. Neither food, nor electronics. Empty store shelves - weren't a reality even in 2022.
5. General distrust towards EU and US companies among population.
6. War still goes on, Ukraine is loosing.
7. Chinese currency, yuan, is taking larger portion in global trade.
So, I guess the main question is: was it really worth it?
PS: russian government didn't forbid to exchange rubbles to US dollars or Euros, US government and EU did, by forbidding officially importing banknotes into Russian Federation, therefor it was hard to obtain physical USD or Euro.
Electronic exchange wasn't affected, but international transactions were (and still are) hard to execute.
Russian government forbade cashing out more than 10k$ from bank account.
Is this guy a professor? If not he should be, he'd be a top favorite at any university
He holds a MSc in Finance from London Business School
When I was studying at school, I took International Political Economy. I asked the professor what America's "comparative advantage" was to be in the new global economy. He yammered something about the knowledge-based service economy and American capital markets. I said "so, borrowing money?" That was 2004. Gold was trading at under $400 an ounce.
And then you did a back-flip, snapped the bad guy's neck, and saved the day
@@FoxtrotYouniform Hello, Ryan
@@varshard0 I'm getting stalker vibes here.
@@varshard0 Hello, Ryan
@@FoxtrotYouniform Hello Ryan
Highly Informative and total clarity.
Fantastic clarity...thanks again Patrick.
Im always accused of being a "murica homer" when I say this, but if the US really does go isolationist the world will be _begging_ it to come back and take its place again.
The US is blamed if it does something, or if it doesn't. They can never win.
not really, we wish America goes offline so shit stops swirling
Please go back to isolation seriously
🤷♂️
Not really, the reason why the US is great is because they poach the best talent and resources globally, if the US dollar was ditched life would be better for other countries
Thanks again professor 🙏🏻
Excellent piece. Thank you.
lets talk about how patrick is always on point, even before doing his daily routine of checking the news, he's already suited up and ready for anything!
Hey Patrick! Reached out to your email just now (Parlance Adept), let us know what you think!
Also, enjoyed absorbing your insights and experience on the power of currency, it is important to keep all this in mind, we appreciate the depth you went to explain in detail.
Patrick, I see that you are either recording this vlog in the world's largest toilet or inside the Russian central bank? I know it's the same place 😀 thanks for your usual, timely and clarifying insight. Cheers Alan
That toilet aroma, mmmmm
I was thinking a dried out Roman bathhouse.😄
Excellent video. I took lots of notes!
Best videos on TH-cam, thank you Patrick.
@PATRICK, does this mean that the US has a strong financial incentive to allow foreign purchases of housing and businesses (as a way to export the dollar)? Everyone hates the rising housing prices caused by foreign (and corporate) speculators... well, maybe everyone except the government
IDK why Americans keep complaining about house prices, they are still cheap compared to other developed countries.
The government is driven by funded politicians who are motivated by variable incentives and do not represent the wishes of the people. The media justifies the rot in the political system and all becomes a plethora of narratives.
@@apacheattackhelicopter8185
It doesn't matter what the price is in other countries. It's that they can't buy that product at the "cheap" price and it becomes less "cheap" when foreign purchase gets involved.
@@apacheattackhelicopter8185 the "it's worse elsewhere" fallacy doesn't fix the issue.
@@NathanHedglin It's not a fallacy bro. What is your definition of cheap and expensive? You can only say if something is cheap or expensive by comparing it to other goods/places.
I thought inflation was caused this time by too many dollars chasing scarce supply of goods and services from reduced production of the pandemic because industry was slowed or stopped.
It is a combination of things, one of which you have correctly identified.
this information is awesome, and well articulated. thanks.
Can you do a video on how Singapore's currency bands work, its benefits/shortcomings compared to a central bank interest rates system.
What's to prevent the US in the future from sanctioning its own citizens in order to enforce certain behaviors?
Frankly I'm worried.
It is already happening to Canadian citizens by their own government, and when the Canadians can have that kind of authoritarian measures imposed upon them by their own government then i pretty sure the American government will have far less hesitation seizing the money of their own citizens who disagree with them.
Okay...
... and if you are worried and you have or would have stockpiles of USD: what would you do then, if you do not trust the USD anymore?
→ Exactly. The most important part is missing in Patrick Boyle's "explanation": weaponizing your currency = a losing trust into it = a shot in the own knee...
a) I doubt that this was an accident
b) I believe, behind the curtain they all play the same "game" - and it is NOT for the ordinary people of their nation's population, but for the owners' class and thus the ordinary people are their enemy.
c) they want to implement a total surveillance system backed by CBDC to rule upon the people
d) I believe, we, the "ordinary people" do have a chance to conquer their narratives and use this weapon against the owners' class.
CBDC = "the ring to rule them all" - and no man nor Hobbit can handle the power of its ownership - only ai can.
We can only setup the rules for the ai - and we can do so a regional adaptive basis and on democratic decision makings...
... but this requires a new system of mass media, based on real discussion and real information plus mandatory alternatives to every point of view that is broadcasted ...
The world we are living in is a manipulated by the mass media one.
You cannot allow to let these manipulated people vote upon fundamental things if they do not understand that slavery for the 99% of us is the outcome of their doing.
A fixed framework with pretty much fixed rules for how to dynamically assign the system's resources and ownerships of the productive assets based on the market-data retrieved from the CBDC is probably the best way to create a win-win situation and balance between the will of ownership and the desires and needs of the market and thus the people.
With a CBDC the invisible hand is becoming a transparent entity.
A CBDC-based economy is going to follow different rules - and most of the arguments for private equity will run into an acceptance problem more sooner then later...
What we do see today is the end game.
you know that like ... your local policeman can lock you in cage for the rest of your life? you know that right?
i can name a few governments doing just that to their citizens right now. Welcome to central systems.
Very well said. The US will benefit if USD is not the reserve currency. And US dominance is not because USD is the reserve currency.
USA will benefit if there is not military industry complex milking taxpayers money's in fake imperial games...and world will benefit if usd is not reserve currency bc is scamm.
Long Term maybe but short term economy will be very bad with Inflation very high and peoples net worth being much lower since most wealth is in Stocks/Real Estate. USA is already having a hard time with finding enough workers to distribute and sell what they import. Manufacturing skills also take a long time to master.
@@johnl.7754 but hasn't manufacturing become very mechanized already. I could be wrong though.
@@someone5582 much of what doesn’t need much labor already is in the US.
@@johnl.7754 At the same time dropping USD as reserve currency is not going to happen overnight either.
> London's role as world financial capital wasn't effected by the loss of Sterling world reserve currency status ... [to paraphrase Patrick at the end of the video]
... but this is only because the actual currency of the vast majority of London trade is the USD, which IS the world reserve currency, and after the fall of Sterling reserve status, the rest of the UK, post-wwII went through a massive stagnation and much social turmoil as a result. There's more to the UK than the Square Mile and Canary Wharf, not that anyone who works there would care less, they're too busy providing the money laundromat for the tax avoidance and criminal schemes of large multi-national corps, and high net worth individuals, many of whom are tied to world criminal networks and kleptocratic networks.
17:30 "and the only way to prevent increased unemployment is to increase borrowing"
Why is this? There are plenty of ways to increase employment other than borrowing.
Very helpful video!
I hope US & Europe's economies aren't roaring. For reducing energy dependence upon Russia, Europe will have to invest heavily and it will have to bear the additional burden of refugees. Due to hperinflation, politicians are losing their popularity. Weaponising dollars was a very bad idea. American economists have been warning against it. Now dollar will lose its shine, seems inevitable.
This excellent video helps me apply my macro classes to the real world!
Your delightful accent adds to the substance of your content....thank you.
Video does not explain well the fact that the 'reserve' currency for the World has not always been USD, and it tends to flow with global trade. Pound Sterling was the reserve currency until decolonisation (British Empire had taken possession of foreign lands and trade by force of arms). USA (like Britain) is a declining nation of trade, and that inevitably means the days of USD as the reserve currency are numbered. What the World will probably eventually get to is DeFi providing reserve currencies for much of the World. UK Government, for example, has just drawn up plans for Britain (no longer the bankers for the World) to become a global cryptoasset technology hub.
Video also doesn't explain why toe nails smell like cheese.
@@simon4133 You just need to wash your smelly feet with antibacterial soap.
The point of the video was not to explain that the reserve currency has not always been the USD.
@@TheMountainBeyondTheWoods Well, would you have realised from the video that one of the World's first reserve currencies was the Mongol Sukhes (they also invented the banknote).
@@eweng903 You really lack basic comprehension.
The amazing mental gymnastic in order to spin the loss of the dollar as reserve currency as a positive thing for the U.S. economy would save Europe from the impending energy crisis if put on a treadmill hooked to a generator.
lol. indeed.
I hope you know this comment is confusing, in that it isn't clear if you're making fun of people or not. He didn't say it was positive. He said it wasn't a negative. You see those things are different right? also how do you counter his point as the UK losing their reserve currency status 80 years ago but being fine today?
The more I consider it the more I realise this is actually an embarrassingly laughable presentation.
@@padraic9242 The UK has gone from being the centre of the world's greatest empire to being a virtual vassal state of the USA.
@@johncale1849 Before Brexit is was one of the powerhouses of the European Union. Now it is alone. Also the USA during Obama didn't want Brexit to happen because it would damage trade relations and the soft power of it's ally. Yet the UK still did Brexit. Do you understand what a vassal state is? Like Northern Cyprus and Turkey? Like North Korea and China? Come on man, just try be less hyperbolic
What happens when the US runs out of assets to sell and that cause the devaluation of the dollar since they still would have to import stuff, but the other countries would not be able to do anything useful with those dollars? It's not like the US is gonna grow all the industry inhouse overnight.
6:15 this is certainly true - but the combination of sanctions on the central bank as well as trade sanctions, that saw Russian imports collapse, meant that its trade balance swung heavily into positive territory, so the impact of freezing of FX reserves ended up being blunted - it simply continued to accumulate foreign assets.
That was an awesome video Patrick. Your summary of Pettis' argument from his book "Trade Wars are Class Wars' was just over the top. What a find you made there. As you suggest instead armed conflict between military blocks the world leaders should be meeting to establish a monetary order that recognizes the grand factors such as energy trade, manufacturing repositioning to the Far East and that the US has become a developing nation.
Thanks for the book tip.
@@Combatwhombat Read the last chapter first for a summary of his argument. The book is somewhat cryptic. You have to google the terms he uses unless its your specialty.
I'd imagine the countries waiting to buy RMB as a reserve currency will form a very short line.
the line is much longer in the "US-bonds swap for gold" section
@@mmtl9203 unironically looks like we're going back to the gold standard.
@@greed864 indeed. Russia's gas for roubles and then roubles/gold link is a powerful initial salvo in this direction.
@@mmtl9203 yea, I saw Indias and Russias main concern with the Ruble Rupie system is being left with a bunch of worthless paper, tying your currency to gold or in the case of Russia to both gold and your natural resources like oil and gas (ala petrodollar) and it seems like a decent system to make transactions for commodities without the US being involved.
@@greed864 i suspect it is far more decent than ppl would ever like to believe having grown accustomed to the Dollarization of the World.
Like i said elsewhere, the gold standard is usually what re-appears when fiat currency system collapses. And they have collapsed many times in the past.
From February 12 1965:
Perhaps never before had a chief of state launched such an open assault on the monetary power of a friendly nation. Nor had anyone of such stature made so sweeping a criticism of the international monetary system since its founding in 1944. There was Charles de Gaulle last week proclaiming that the primacy of the dollar in international dealings was finished, calling for an eventual return to the gold standard -which the world's nations scrapped 50 years ago - and practically inviting other countries to follow France's lead and cash in their dollars for gold. It was a particularly nettling irritant just as the U.S. was deeply involved in making some hard decisions about its monetary policy.
We were near war against France on this one especially since we bailed out France thrice: WWI, WWII, Vietnam.
The costs of cutting off Russian fossil fuels may be unpalatable, but Europeans seem willing to bear that cost, at least at the moment. Germany's "energy independence by 2024" plan already includes measures for mild to moderate power rationing during the summer. Despite that very short timeframe, Germany also seems to be preparing for for the possibility of cutoff of of Russian gas by next year.
Even if the US stops selling LNG to Asia, including its Asian allies, it looks like there aren't enough tankers in the world to supply the whole of Western Europe. This will be complicated by the fact that Poland's LNG port and storage facilities will basically become the bottleneck for most of Europe.
Could the resulting energy shortage result in a worldwide recession or depression? If so, how likely would that be?
Good content sir Patrick Boyle! :) Thank you for further explaining the effects of war in global economy. Right now there is a rumor that Russia is buying gold and it seems that they making gold as currency for the country how does it affect the global economy? Can I humbly request for your opinion about this? Thanks and more power to your channel
With great power comes no responsibility probably USA.
It used to be said of cricket sides and nations not going to war long before the Golden Arch theory.
Ahem...To quip here in a light hearted manner...There were 3 people viaing for a top job at very well known corporation. The first was a Mathematician and he was asked, what is 2+2.? The Mathematician said, = 4. He was then asked, if he was sure yes he said, he is sure. Hah. The next was an Accountant, and he was asked how much is 2+2.? And he replied it is 4...He then asked if he was he sure... Ah... the Accountant said, give or take 10%..Hahaa. The next was an Economist and he was asked the same question. How much is 2+2...? The Economist immediately got up closed and locked the door and let down the blinds...And sat down next to the interviewer. Then Economist then asked "How Much Do U Want to Be.....Whooohaaa... Hahaa.